ASSESSMENT OF LAND REFORM FARMS JOHAN JORD RDAA AAN FACULTY OF - - PowerPoint PPT Presentation

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ASSESSMENT OF LAND REFORM FARMS JOHAN JORD RDAA AAN FACULTY OF - - PowerPoint PPT Presentation

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ASSESSMENT OF LAND REFORM FARMS JOHAN JORD RDAA AAN FACULTY OF SCIENCE SCHOOL FOR NATURAL RESOURCE MANAGEMENT AGRICULTURAL MANAGEMENT GEORGE CAMPUS johan.jordaan@mandela.ac.za 044 801 5111 OUTLINE The Project The Process The

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ASSESSMENT OF LAND REFORM FARMS

JOHAN JORD RDAA AAN

FACULTY OF SCIENCE SCHOOL FOR NATURAL RESOURCE MANAGEMENT AGRICULTURAL MANAGEMENT GEORGE CAMPUS johan.jordaan@mandela.ac.za 044 801 5111

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OUTLINE

  • The Project
  • The Process
  • The Perks
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The Project: where it started….

  • Peri-urban agriculture: Thembalethu (2002)
  • Development of a Demonstration and

Training Business Incubator (DTBI)

  • British Council HEL Scheme
  • Abrupt ending!!
  • Central Karoo District (2007)
  • Assessment of farming practices and

economic viability of Land Reform farms

  • Eden District (2012)
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Project background: how it started

  • Land Reform policies increasingly being questioned publicly?
  • Slow pace….
  • Ability to improve livelihoods…..
  • Ability to improve agricultural productivity and food security…..
  • From past personal experience as Agric. Economist – financial

literacy/management capacity often a challenge in SME’s

  • Project design:
  • Requested funding from USA philanthropic organisation to develop a

“short course programme” for improving Financial Literacy of land reform farmers (2006)

  • Sourced a list of land reform farms from Western Cape Department of

Agriculture (Farmer Support & Development Directorate) – Central Karoo

  • Baseline study first (2007)
  • Involve final year students (B.Tech. Agric Management)
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Baseline study findings (macro –level)

  • Impressive metrics in Central Karoo:
  • About 20 + farms transferred to new ownership
  • More than 50 000 hectares with asset value of more than R 49 million
  • More than 350 beneficiaries
  • However: a more appropriate question:
  • What happens at farm level?
  • What is the capacity to generate returns from these assets?
  • for sustaining a livelihood
  • for repayment of debts
  • for future growth and contributing to food security & broader economy
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Baseline study findings (micro –level) alters the course of the project…..

  • Farm situation
  • Agric. Managers middle-aged/elderly, diverse education levels
  • No prior experience of farming – labourer/commonage farmers
  • Dominant business form is Community land trusts – large numbers,

non-resident on farm, non-involvement in farming operations, conflict and power relations (Ẋ = 23 ; min = 2; max = 69)

  • Financial situation
  • Good solvency (capital investment through Comprehensive Agric.

Support program (CASP) funding) but low asset turnover (0.01:1)

  • Income problem – low farm efficiency coupled with high overhead cost

structure (exacerbated by further capital investment via CASP)

  • Low returns on investment (-1.57%) and debt repayment difficulties
  • Small farm size, relative to number of beneficiaries – in reality creating

a new form of communal farming………

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New form of communal farming?

Farm size category Veld carrying capacity (ha/LSU) Average size per beneficiary (ha) Maximum number of SSU’s per beneficiary <1000 ha 39 71 11 1001 – 2000 ha 38 90 14 2001 – 3000 ha 30 124 25 3001 – 4000 ha 31 128 25 4000 + ha 33 120 22 Average (Ẋ = 2684) 33.4 115 21

Carrying capacity: (min = 42 ha/LSU; max = 24 ha/LSU) 2008 stocking rate: 46.92 ha / LSU - mostly under stocked (BUT: 27 % of farms overstocked; in 2012 almost 40 % of farms overstocked)

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  • 200
  • 150
  • 100
  • 50

50 100 150 200 250 2008 2009 2010 2011 2012 Rand / SSU

Dorper sheep: Change in income components

Capital income (Inventory change) Trading income

Erosion of productive assets: sell-off

  • f breeding livestock
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Baseline summary – important issues

  • New farmers do not generate a sufficient return on their investments yet –

returns are not sufficient for sustaining livelihoods and for further growing the income-generating capacity of the business.

  • The major challenge is to increase the income through sound technical and

scientific management.

  • Many of the farm management practices need to change to fully harness

the capacity of their resources. This include aspects such as record- keeping, budgeting, financial management, marketing and entrepreneurial development.

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So…what now?

  • Forced us to re-think initial idea of “Short course in Financial Literacy”
  • Widespread systemic deficiencies in farm operations and farmer skills

sets called for a different approach/process

  • New approach (new project):
  • “Partner” with Western Cape Department of Agriculture
  • Fully involve final year students in annual Monitoring and Evaluation

(M & E) process

  • Restructure project into annual assessment of farming practices and

economic viability of farms

  • Farmers to learn in their own environment with their own resources to

their own benefit (as opposed to “short course”)

  • Provide a Farm Management Information System (MIS)
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The Process…..

  • Land reform farmers (8 – 12) identified by Department of Agriculture
  • Annually visit each farm with about 8 students plus extension
  • fficers/project leaders of Department of Agriculture (2-week field work)
  • Three main activities:

1.

Physical livestock handling and treatment

2.

Farm survey and analysis: personal interview/questionnaire (for economic analysis)

3.

Feedback to farmers and to Department of Agriculture

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Activity 1: livestock handling and treatment

  • Classing & recording of animals according to age/reproduction

status

  • Weigh and record all animals
  • Tagging animals (id. & management)
  • Pregnancy testing
  • Dip, dose, vaccinate or treat as necessary
  • Hands-on training
  • Establish management information system for farmer
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Activity 2: Farm survey & analysis: personal interview & questionnaire

  • 1 x farm allocated per student
  • 3 – 4 hour interview / semi-structured questionnaire
  • Student fully responsible for analysing economic viability within 3

weeks of survey

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Activity 3: Feedback

  • Student feedback: each student individual consultation with farmer -

written consultation report & discuss economic/ financial performance

  • Department of Agriculture feedback: Technical / operational
  • University feedback: lecturer feedback to farmer group and all economic

data provided to the Department for further use in their extension programmes / development interventions.

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Examples - some crucial management information (and what it reflects)

R -200,000 R -150,000 R -100,000 R -50,000 R 0 R 50,000 R 100,000 2011/122012/132013/142014/152015/162016/172017/18

Trends in Margins and Farm Profits Gross Margin Farm Profit

  • 300.00
  • 200.00
  • 100.00

0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00 800.00

2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

Price-Cost squeeze: Mutton sheep 2011/12 - 2017/18 Income Cost

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YEARS

2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

Performance measure Capital Turnover 0.02 0.03 0.02 0.02 0.02 0.02 0.05 Cost ratio 2.11 0.42 2.83 2.94 2.60 2.77 1.87 Return on investment

  • 3.1%
  • 1.0%
  • 3.7%
  • 2.7%
  • 4.7%
  • 3%
  • 5%

Examples - some crucial management information (and what it reflects)

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“A unique 4-way partnership spanning all four engagement categories”

Student Department of Agriculture University Community & Industry

(Service delivery) (Discipline-based service to community) (WIL & service and outreach)

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The Perks…..

  • For Farmers:
  • “Free” business consultation (detail technical & financial)
  • Personalized, customized training within own farm context
  • Own management information/decision support system (MIS)
  • Data to assist with context-based future development interventions by

Department of Agriculture

  • For the Department of Agriculture:
  • Use of students for assistance with animal handling and survey
  • Data on individual farmer development - feedback loop and trends
  • Basis for extension and advisory services planning & intervention
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The Perks…..

  • For Students:
  • Involvement in real-time/real-life work situation/workplace realities (WIL)
  • Allow integration of theory and practice and develop work-readiness
  • Personal development and development of M & E and consulting skills,

enhancing employability (4th Industrial Revolution……)

  • Opportunity to provide a service and outreach to the community –

responsible citizenship

  • For the University:
  • Allow for engagement with industry and service and outreach to the

community

  • Allow for learning about realities in the workplace and integration with

classroom teaching and learning to add value

  • Allow for the provision of professional/discipline based knowledge and

skills to industry

  • Provides opportunities for research
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Reflections

  • Challenges
  • Time – scheduling of time within a normal academic programme

becomes an exercise in creativity

  • No tangible monetary reward (e.g. research subsidies)
  • Community/industry dynamics - political agendas / trust relationships
  • Lessons learned
  • Be adaptive on-the-go (Action Research principles….)
  • Don’t expect immediate results
  • Be acutely aware of political agendas (especially if you are starting to

make a difference…)

  • Try to link with research
  • Institutional enablers
  • Time and money…..
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Some project outputs

  • Reports to Department of Agriculture:
  • Annual farm survey reports
  • Skills Assessment Report
  • Conference papers
  • 1 x local conference paper
  • 3 local conference posters
  • 1 x International conference paper
  • Peer reviewed journal articles
  • 1 x international journal
  • 2 x local journals
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Further reading

  • Jordaan, JW and Grobler, HJF, 2011. Farmer support and extension to land reform farms

in the Central Karoo - Part 1: a baseline survey of farm potential, farmer profiles and farm management knowledge and practices. South African Journal of Agricultural Extension 39 (1): 35-44.

  • Jordaan, JW and Grobler, HJF, 2011. Farmer support and extension to land reform farms

in the Central Karoo - Part 2: a baseline assessment of farm-level economic viability. South African Journal of Agricultural Extension 39 (1): 45-54.

  • Jordaan, J.W. & Alderson, M. 2009. Scale, skill and sustainable livelihoods – participatory

approaches to improving poultry production in peri-urban communities: evidence from South Africa. Outlook on Agriculture 38 (1).

  • Jordaan, JW and Taylor, GJ. Innovation at the local level: experiences of a South African

university in the transfer of knowledge and technology to rural and peri-urban agricultural enterprises through business incubation. 7th Conference of the Global Consortium of Higher Education and Research for Agriculture, Beauvais, France, 27 – 29 June 2011.

  • Jordaan JW, Grobler HJF & Matthee SW. 2010. Land Reform in the arid Central Karoo: a

baseline assessment of farm-level economic viability and implications for extension

  • delivery. South African Society for Agricultural Extension National Conference, 3 - 7 May

2010, Club Mykonos, Langebaan. (Received “Best paper” award)

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